PLAN FOR LOAN CONVERSION

Hawera Star, Volume LII, 1 March 1933, Page 5

PLAN FOR LOAN CONVERSION

Lower New Zealand Interest Costs WHOLE OF £lls-MILLION INTERNAL DEBT Voluntary Reduction to Four Per Cent Hope of £570,000 Saving in Budget

The conversion of the whole of the Government debt domiciled in New Zealand, totalling £115,320,000, to aerate of interest reduced by 20 per cent., with a minimum of 4 per cent., from April 1, was announced by the Minister of Finance, the Rt. Hon. J. G. Coates, on the introduction in the House of Representatives last evening of the New Zealand Debt Conversion Bill. According to Mr Coates the net gain to the Budget will be £570,000 in a full year. In view of the great importance of the conversion, strong appeals were made by both Mr Coates and the Prime Minister, the Rt. Hon. G. W. Forbes, who followed, for a nation-wide response, Mr Forbes characterising the Bill as one of the most important pieces of legislation Parliament had ever been called upon to pass. In essence the reduction of interest will be 20 per cent, with a minimum of 4 per cent, (apart from free of income-tax securities), for the balance of the term of existing securities, and an actual return of 4 per cent, only from then until the maturity date of the new securities. Apart from the debt conversion, Mr Coates announced that after protracted negotiations with the banks, overdraft rates were to be reduced from 6 per cent, to 5 per cent, from May 1. The Live Stock Auctioneers’ and Agents’ Association is to reduce interest rates on stock and station agents’ accounts by 1 per cent, to a minimum of 6 per cent., and this is expected to be ratified by all affiliated organisations. In addition, it i.s proposed that Post Office and trustee savings bank deposit rates which are now 3f per cent, up to £SOO, are to be reduced to a basic savings bank rate of 3 per cent, from April 1, buT power is being taken to increase the rate to 3J per cent, if it is found money is being withdrawn from savings banks in favour of the trading banks. Legislation to bring about a reduction in the yield from local body securities by 20 per cent, will be introduced later by the Government.